1.If to be cobranded,place other logo here;otherwise delete this text box McCarthy Ttrault Advance Building Capabilities for GrowthWhat Every Business Needs to KnowAbout Technology LawSeptember 20, 2012McCarthy Ttrault LLP / mccarthy.ca

2. Cases before the Supreme Court2 Entertainment Software Association v. Society of Composers,Authors and Music Publishers of Canada, 2012 SCC 34 (ESA vSOCAN) Rogers Communications Inc. v. Society of Composers, Authors andMusic Publishers of Canada, 2012 SCC 35 (Rogers v SOCAN) Society of Composers, Authors and Music Publishers ofCanada v. Bell Canada, 2012 SCC 36 (SOCAN v Bell) Alberta (Education) v. Canadian Copyright Licensing Agency(Access Copyright), 2012 SCC 37 (Access Copyright) Re:Sound v. Motion Picture Theatre Associations of Canada, 2012SCC 38 (RE:Sound)McCarthy Ttrault LLP / mccarthy.ca 3. Principles of construction3 The Act reflects a balance in copyright between promoting the public interestin the encouragement and dissemination of works and obtaining a justreward for the creator. The Act should be construed in a technologically neutral manner. ESA vSOCAN, Rogers v SOCAN The Act should be interpreted to extend to technologies that were not orcould not have been contemplated at the time of its drafting. It exists toprotect the rights of authors and others as technology evolves. Rogers vSOCAN Treaties to which Canada is a party can be used to construe the Act. Rogersv SOCAN, ESA v SOCAN Foreign copyright cases must be scrutinized very carefully before beingapplied in Canada because of the different wording and policyconsiderations in the Canadian and foreign legislation. Rogers v SOCAN,Re:Sound McCarthy Ttrault LLP / mccarthy.ca 4. Interpretation of the communication to 4the public right In ESA v. SOCAN, the Court ruled that a download of a video gamewas not a communication within the meaning of Section 3(1)(f). The right to communicate is connected to the right to perform awork and not the right to reproduce permanent copies of the work. A download is merely an additional, more efficient way to delivercopies of the games to customers. The downloaded copy is identicalto copies purchased in stores or shipped to customers by mail, andthe game publishers already pay copyright owners reproductionroyalties for all of these copying activities. The Internet is simply a technological taxi that delivers a durablecopy of the same work to the end user. Implications: Using the internet to deliver goods that contain musice.g., video games, podcasts, movies and TV programs, software, AVworks, books, will not attract separate communication to the publicroyalties to SOCAN. McCarthy Ttrault LLP / mccarthy.ca 5. Interpretation of the communication to5the public right In Rogers v. SOCAN, the Court ruled that on-demand transmissions ofmusic streams as part of online music services are communications that areto the public. The term telecommunication should be broadly construed so as to apply tocommunications that do not depend on the types of technology used toeffect the communication. An on-demand communication of a work to members of the public can be acommunication that is to the public. The Act applies to push as well as topull means of transmitting works to the public. The applicability of the communication to the public right is not dependanton the arbitrary choice of business models. Implications: Online streaming services including on-demand online musicservices, on-demand video rental/streaming services, TV video on demand,UGC sites, interactive gaming sites etc, have to pay communication(performance) royalties as well as reproduction royalties. McCarthy Ttrault LLP / mccarthy.ca 6. Interpretation of the fair dealing6defence The Access Copyright case was a judicial review from a decision ofthe Copyright Board which examined whether copying of shortextracts for classroom teaching purposes was a fair dealing. TheBoard and the Federal Court of Appeal had found it was not. TheSupreme Court allowed the appeal and remitted the matter back tothe Board to reconsider its decision in accordance with itsconstruction of the fair dealing defence. The Bell v. SOCAN case addressed whether previews of musicmade available by online music services were a fair dealing for thepurposes of research. The Board and the Federal Court of Appealheld they were. The Court affirmed that holding. McCarthy Ttrault LLP / mccarthy.ca 7. Interpretation of the fair dealing7defence Fair dealing is a user right. The term private study can include students in a classroom setting. The wordprivate in private study should not be understood as requiring users to viewcopyrighted works in splendid isolation. Studying and learning are essentiallypersonal endeavours, whether they are engaged in with others or in solitude.Providing excerpts of texts to students in class is private study. The term research must be given a large and liberal interpretation and caninclude users listening to previews to decide whether to purchase music.Research is not limited to creative purposes. It can be piecemeal, informal,exploratory, or confirmatory. It can in fact be undertaken for no purpose exceptpersonal interest. The relevant perspective when considering whether a dealing is for anallowable purpose is that of the user and not the copier. The copiers purposeis relevant in the fairness analysis. copiers cannot camouflage their owndistinct purpose by purporting to conflate it with the research or study purposesof the ultimate user. McCarthy Ttrault LLP / mccarthy.ca 8. Interpretation of the fair dealing 8 defence Will be easier to establish that the purpose of a dealing is allowable e.g. focuson users, and interpretations of research and private study. Will potentially benefit online uses and online service providers. Will be even broader when C-11 comes into force. Brings Canada closer to U.S. fair use. User rights, focus on users rather than on copiers, and the ability toestablish fairness by showing a practice or system that is fair, makes fairdealing extremely broad and unpredictable. Decisions will affect rights holders.McCarthy Ttrault LLP / mccarthy.ca 9. Questions for future cases9 When is a transmission a stream or a download? Will the new making available right in Bill C-11 coverdownloads and streams? How predicable/uncertain will it be to develop businessmodels based on fair dealing?McCarthy Ttrault LLP / mccarthy.ca 10. VANCOUVER MONTRALSuite 1300, 777 Dunsmuir Street Suite 2500P.O. 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